Item 1A. Risk Factors
Item
1A. Risk Factors
Investing
in our Common Stock involves a high degree of risk. The following risk factors should be considered carefully in addition to the
other information contained in this Annual Report. This Annual Report contains forward-looking statements. Our business, financial
condition, results of operations and stock price could be materially adversely affected by any of these risks.
10
Risks
Related to Our Business
We
will need to raise substantial additional capital to operate our business. If we cannot obtain the capital we need to continue our operations,
our business could fail.
We
will need to raise additional funds in order to continue operating our business beyond the near term. Since inception, we have primarily
funded our operations through equity and debt financings and, more recently, with operating profits. If we do issue equity or convertible
debt securities to raise additional funds or to fund, in whole or in part, acquisitions in furtherance of our business strategy, our
existing stockholders may experience substantial dilution, and the new equity or debt securities may have rights, preferences and privileges
senior to those of our existing stockholders. If we incur additional debt, it would increase our leverage relative to our earnings, if
any, or to our equity capitalization, requiring us to pay additional interest expense. Obtaining commercial loans, assuming those loans
would be available, would increase our liabilities and future cash commitments. We also may raise funds by selling some or all of our
assets. Regardless of the manner in which we seek to raise capital, we may incur substantial costs in those pursuits, including investment
banking fees, legal fees, accounting fees, and other related costs.
The Company may not be able to continue as a
going concern.
During the year ended December 31, 2024, the Company
incurred a net loss of $9,798,083, and $1,591,426 of cash was used by the Company’s operating activities. The Company estimates
that it may not have sufficient funds to operate its business for 12 months given its cash balance as of December 31, 2024 of approximately
$167,286 and revenues being generated by the Company’s operating business segments. The ability of the Company to continue as a going concern is
dependent on the Company’s ability to fund future operations through additional financing from investors and/or lenders or through
the sale of its securities or through development of its operations. Due to these and other factors, there is substantial doubt of the
Company’s ability to continue as a going concern.
Our
limited operating experience could make our operations inefficient or ineffective.
We
have only a limited operating history upon which to base an evaluation of our current business and future prospects and how we will respond
to competitive, financial or technological challenges. In addition, because of our limited operating history, we have limited insight
into trends that may emerge and affect our businesses, and limited experience responding to such trends. We may make errors in predicting
and reacting to relevant business trends and we will be subject to the risks, uncertainties and difficulties frequently encountered by
early-stage companies in evolving markets. We may not be able to successfully address any or all of these risks and uncertainties. Failure
to adequately do so could cause our business, results of operations and financial condition to suffer or fail.
We
may not be able to manage our expansion of operations effectively.
Assuming
we are able to attract additional capital, we intend to expand our operations. To manage this growth, we may need to expand our facilities,
augment our operational, financial and management systems and hire and train qualified personnel. Our management will also be required
to develop new relationships with customers, suppliers and other third parties. Our current and planned operations, personnel, systems,
and internal procedures and controls may not be adequate to support our future growth. If we are unable to manage our growth effectively,
we may not be able to take advantage of market opportunities, execute our business strategies or respond to competitive pressures.
If
we are unable to hire and retain qualified personnel, we may not be able to implement our business plan.
As
of March 27, 2025, we employed 18 full-time employees. Attracting and retaining
personnel will be critical to our success. As a small company with an uncertain future, we may not be able to attract and retain the
qualified personnel necessary for the development of our business. In addition, we may have difficulty recruiting necessary
personnel as a result of our limited operating history. The loss of key personnel or the failure to recruit necessary additional
personnel could impede the achievement of our business objectives.
In
addition, we expect to rely on independent organizations, advisors and consultants to provide certain services. The services of these
independent organizations, advisors and consultants may not be available to us on a timely basis when needed or on acceptable terms,
and if they are not available, we may not be able to find qualified replacements. If we are unable to retain the services of qualified
personnel, independent organizations, advisors and consultants, we may not be able to implement our business plan.
Our
CEO and certain other Company employees devote substantial portions of their time to businesses other than the Company’s business.
Certain
of our officers, directors and employees devote substantial portions of their time to businesses of other companies. Our CEO,
Michael Cavanaugh, currently serves as Chief Investment Officer of Tower 1 Partnership, LLC, an investment firm focused on private
and public investments in a variety of industries, as Managing Partner and Co-Founder of Atlas Resolution Partners LLC, an advisory
firm focused on resolving complex private capital fund issues, and as the manager of several non-affiliated investment partnerships,
pursuant to which he devotes a significant portion of his time. The commitments of our officers, directors and employees to these
other businesses may cause them to devote less time to the Company than would otherwise be the case.
11
Cyber
incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
We
depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of
third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure,
or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary
information and sensitive or confidential data. As an early-stage company without significant investments in data security protection,
we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or
to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of
them, could have adverse consequences on our business and lead to financial loss.
We
may have difficulty accomplishing our growth strategy within and outside of our current service areas.
Our
ability to expand our business, both within our current service areas and into new areas, involves significant risks, including, but
not limited to:
●
changes
in regulatory landscape reducing the demand for, and incentives relating to, alternative energy developments, such as solar energy
projects, our land reclamation, water treatment and related environmental services;
●
receiving
or maintaining necessary regulatory permits, licenses or approvals;
●
downturns
in economic or population growth and development in our service areas, particularly in the coal mining industry and in those agricultural
and commercial businesses and real estate developments which benefit from our land reclamation and water treatment services;
●
risks
related to planning and commencing new operations, including inaccurate assessment of the demand for alternative energy
developments, such as solar projects, our land reclamation, water treatment and related environmental services and products and
inability to begin operations as scheduled; and
●
our
potential inability to identify suitable acquisition opportunities or to form relationships with coal mining operators or other landowners
necessary to form strategic partnerships.
Operating
costs, construction costs and costs of providing services may rise faster than revenue.
Our
ability to increase the rates at which we provide our land reclamation, water treatment and related environmental services may be
limited by a variety of factors. However, our costs are subject to market conditions and other factors, and may increase
significantly. The second largest component of our operating costs is made up of salaries and wages. These costs are affected by the
local supply and demand for qualified labor. Other large components of our costs are general insurance, workers compensation
insurance, employee benefits and health insurance costs. These costs may increase disproportionately to our revenues and service
rate increases and may have a material adverse effect on our financial condition and results of operations.
Our
suppliers may fail to deliver materials and parts according to schedules, prices, quality and volumes that are acceptable to us, or we
may be unable to manage these materials and parts effectively.
The
equipment we use in our land reclamation and water treatment and reclamation business contains materials and parts purchased globally
from many suppliers which exposes us to potential component shortages or delays. Unexpected changes in business conditions, materials
pricing, labor issues, wars such as the current conflicts in Gaza and Ukraine, trade policies, natural disasters, health epidemics such
as the global COVID-19 pandemic, trade and shipping disruptions, port congestions and other factors beyond our or our suppliers’
control could also affect these suppliers’ ability to deliver components to us or to remain solvent and operational. Additionally,
if our suppliers do not accurately forecast and effectively allocate production or if they are not willing to allocate sufficient production
to us, it may reduce our access to components and require us to search for new suppliers. The unavailability of any component or supplier
could result in delays in providing our services and products. Our suppliers may not be willing or able to sustainably meet our timelines
or our cost, quality and volume needs, or to do so may cost us more, which may require us to replace them with other sources. While we
believe that we will be able to secure additional or alternate sources for most of our necessary components or products, there is no
assurance that we will be able to do so quickly or at all or at prices that are financially feasible.
12
Our
financial results depend on successful project execution and may be adversely affected by cost overruns, failure to meet customer schedules
or other execution issues.
A
portion of our revenue is derived from projects that are technically complex and that may last over many months. These projects are subject
to a number of significant risks, including project delays, cost overruns, changes in scope, unanticipated site conditions, design and
engineering issues, incorrect cost assumptions, increases in the cost of materials and labor, safety hazards, third party performance
issues, weather issues and changes in laws or permitting requirements. If we are unable to manage these risks, we may incur higher costs,
liquidated damages and other liabilities to our customers, which may decrease our profitability and harm our reputation. Our continued
growth will depend in part on executing a higher volume of large projects, which will require us to expand and retain our project management
and execution personnel and resources.
We
face competition in our industry, and we may be unable to attract customers and maintain a viable business.
There
can be no assurance that we will be able to successfully compete with our competitors. Our competitors may be able to offer similar services
which prove to be more popular with potential customers than our services. Our ability to grow and achieve profitability will depend
on our ability to satisfy our customers and withstand increasing competition by providing superior environmental services at reasonable
cost. There can be no assurance that we will be able to achieve or maintain a successful competitive position.
If
we become subject to environmental-related claims, we could incur significant cost and time to comply.
Our
land reclamation and water treatment business activities create a risk of significant environmental liabilities and reputational damage.
Under applicable environmental laws and regulations, we could be strictly, jointly and severally liable for releases of regulated substances
by us at the properties of others, including if such releases result in contamination of air or water or cause harm to individuals. Our
business activities also create a risk of contamination or injury to our employees, customers or third parties, from the use, treatment,
storage, transfer, handling and/or disposal of these materials.
In
the event that our business activities result in environmental liabilities, such as those described above, we could incur significant
costs or reputational damage in connection with the investigation and remediation of environmental contamination, and we could be liable
for any resulting damages including natural resource damages. Such liabilities could exceed our available cash or any applicable insurance
coverage we may have. Additionally, we are subject to, on an ongoing basis, federal, state and local laws and regulations governing the
use, storage, handling and disposal of these materials and specified waste products. The cost of compliance with these laws and regulations
may become significant and could have a material adverse effect on our business, financial condition, results of operations or prospects.
Further,
we may incur costs to defend our position even if we are not liable for consequences arising out of environmental damage. Our insurance
policies may not be sufficient to cover the costs of defending such claims.
Failure
to effectively treat emerging contaminants could result in material liabilities.
A
number of emerging contaminants might be found in water that we treat that may cause a number of illnesses. In applications where treated
water enters the human body, illness and death may result if contaminants or pathogens are not eliminated during the treatment process.
The potential impact of a contamination of water treated using our products, services or solutions is difficult to predict and could
lead to an increased risk of exposure to product liability claims, increased scrutiny by federal and state regulatory agencies and negative
publicity. Further, an outbreak of disease in any one of the markets we serve could result in a widespread loss of customers across such
markets.
13
We
may incur liabilities to customers as a result of failure to meet performance guarantees, which could reduce our profitability.
Our
customers may seek performance guarantees as to our services. Failure to meet specifications of our customers or our failure
to meet our performance guarantees may increase our costs by requiring us to provide additional resources and services, monetary reimbursement
to a customer or could otherwise result in liability to our customers. To the extent that we incur substantial performance guarantee
claims, our reputation, earnings and ability to obtain future business could be materially adversely affected.
Developments
in, and compliance with, current and future environmental and climate change laws and regulations could impact our land reclamation and
water treatment business, financial condition or results of operations.
Our
business, operations, and product and service offerings are subject to and affected by many federal, state, local and foreign environmental
laws and regulations, including those enacted in response to climate change concerns. Compliance with existing laws and regulations currently
requires, and compliance with future laws is expected to continue to require, increasing operating and capital expenditures in order
to conform to changing environmental standards and regulations, which could impact our business, financial condition and results of operations.
Furthermore, environmental laws and regulations may authorize substantial fines and criminal sanctions to address violations, and may
require the installation of costly pollution control equipment or operational changes to limit emissions or discharges. We also incur,
and expect to continue to incur, costs to comply with current environmental laws and regulations. At the same time, the demand for our
land reclamation and water treatment services also is driven by federal and state laws, regulations and programs which create incentives
for our services. Developments such as the adoption of new environmental laws and regulations, stricter enforcement of existing laws
and regulations, violations by us of such laws and regulations, discovery of previously unknown or more extensive contamination, litigation
involving environmental impacts, our inability to recover costs associated with any such developments, or the financial insolvency of
other responsible parties could in the future have a material adverse effect on our financial condition and results of operations.
Our
insurance may not provide adequate coverage.
Although
we maintain general and product liability, property and commercial insurance coverage in amounts which we consider prudent, there
can be no assurance that such insurance will prove adequate in the event of actual casualty losses or broader calamities such as
earthquakes, financial crises, economic depressions or other catastrophic events, which are either uninsurable or not economically
insurable. Any such losses could have a material adverse effect on the performance of our services and on our financial condition
and results of operations.
Our
land reclamation and water treatment business is subject to various statutory and regulatory requirements, which may increase in the
future.
Our
land reclamation and water treatment business is subject to various statutory and regulatory requirements. Our ability to continue to
hold licenses and permits required for our land reclamation and water treatment business is subject to maintaining satisfactory compliance
with such requirements. We may incur significant costs to maintain compliance. Our ability to obtain modifications to our permits may
be met with resistance, substantial statutory or regulatory requirements or may be too costly to achieve. These requirements may cause
us to postpone or cancel our plans. Future statutory and regulatory requirements, including any legislation focused on combating climate
change, may require significant cost to comply or may require changes to our products or services.
The
environmental regulations to which we are subject may increase our costs and potential liabilities and limit our ability to operate.
Our
land reclamation and water treatment business is subject to various federal, state, and local environmental requirements, including those
relating to emissions to air, discharged wastewater, storage, treatment, transport and disposal of regulated materials and cleanup of
coal mining and groundwater contamination. Efforts to conduct our operations in compliance with all applicable laws and regulations,
including environmental rules and regulations, require programs to promote compliance, such as training employees and customers, purchasing
health and safety equipment and in some cases hiring outside consultants and lawyers. Even with these programs, we face the risk of being
subject to government enforcement proceedings, which can result in fines or other sanctions and require expenditures for remedial work
on contaminated sites. The landscape of environmental regulation to which we are subject can change. Changes to environmental regulation
often present new business opportunities for us; however, such changes may also result in increased operating and compliance costs. While
we seek to monitor the landscape of environmental regulation, our ability to navigate is limited by our small size and resources, and
any changes to such regulations may result in a material effect on our operations, cash flows or financial condition.
14
Regulators
also have the power to suspend or revoke permits or licenses needed for operation of our equipment and vehicles based on, among other
factors, our compliance record, and customers may decide not to do business with us because of concerns about our compliance record.
Suspension or revocation of permits or licenses would impact our land reclamation and water treatment business and could have a material
impact on our financial results. Although we have never had any of our operating permits revoked, suspended or non-renewed involuntarily,
it is possible that such an event could occur in the future.
Certain
environmental laws and regulations impose liability and responsibility on present and former owners, operators or users of facilities
and sites for contamination at such facilities and sites without regard to causation or knowledge of contamination. Investigations undertaken
in connection with these activities may lead to discoveries of contamination that must be remediated, and closures of facilities might
trigger compliance requirements that are not applicable to operating facilities.
Within
the coal mining remediation market, demand for our services will be limited to a specific customer base and highly correlated to the
coal mining industry. The coal mining industry’s demand for our services is affected by a number of factors including
the volatile nature of the coal mining industry’s business, increased use of alternative types of energy and technological developments
in the coal mining extraction process. A significant reduction in the target market’s demand for coal mining would reduce the demand
for our services, which would have a material adverse effect upon our business, financial condition, results of operations
and cash flows.
We
require a variety of permits to operate our business. If we are not successful in obtaining and/or maintaining those permits it will
adversely impact our operations.
Our
land reclamation and water treatment business requires permits to operate. Our inability to obtain permits in a timely manner could result
in substantial delays to our business. The issuance of permits is dependent on the applicable government agencies and is beyond our control
and that of our customers. There can be no assurance that we and/or our customers will receive the permits necessary to operate, which
could substantially and adversely affect our operations and financial condition.
Based
on the nature of our business, we currently depend and are likely to continue to depend on a limited number of customers for a significant
portion of our revenues.
We
currently have one customer in West Virginia that accounts for all of our land reclamation and water treatment business.
The failure to obtain additional customers or the loss of all or a portion of the revenues attributable to any current or future customer
as a result of competition, creditworthiness, inability to negotiate extensions or replacement of contracts or otherwise could have a
material adverse effect on our business, financial condition, results of operations and cash flows.
If
our customers do not enter into, extend or honor their contracts with us, our profitability could be adversely affected. Our ability to
receive payment for production depends on the continued solvency and creditworthiness of our customers and prospective customers. If
any of our customers’ creditworthiness suffers, we may bear an increased risk with respect to payment defaults. If customers refuse
to make payments for which they have a contractual obligation, our revenues could be adversely affected.
15
If
we are unable to identify and acquire businesses or assets in furtherance of our impact investing strategy, we may be unable to generate
significant revenue.
We
intend to acquire additional businesses and assets that will generate revenue related to our impact investing strategy. There can
no assurance that we will be able to do so, or to do so on terms that are acceptable to us, or in a manner that will provide us with
the revenue we expect.
Our
consideration of sustainability and environmental criteria as the pre-eminent part of our business and investment strategy will limit
the types and number of business opportunities available to the Company and may result in the Company engaging in industry sectors that
underperform the market as a whole, or forgoing opportunities to invest available capital in businesses that might otherwise be advantageous
to acquire or develop. If we are not successful in acquiring or developing desirable businesses or assets which fit within our business
strategy or if those businesses do not generate sufficient revenue, our business, financial condition and results of operations could
be materially adversely affected.
Our
impact investing strategy is new, untested and may not be successful.
Our
impact investing strategy is qualitative and subjective by nature, and there is no guarantee that the factors we utilize in making capital
and other resource allocation decisions or any judgment exercised by our management or board will reflect the opinions of any particular
shareholder, and the investment criteria utilized by the Company may differ from the investment criteria that any particular shareholder
considers relevant in evaluating a company’s sustainability or impact investing practices. In making allocation and investment
decisions, Company management will be dependent upon information and data obtained through voluntary or third-party reporting, if available,
that may be incomplete, inaccurate or present conflicting information and data with respect to a particular opportunity, which in each
case could cause the Company to incorrectly assess a potential target’s business practices. In implementing its impact investing strategy,
management will seek to exclude businesses deemed to be fundamentally misaligned with the Company’s sustainability principles.
In addition, as a result of the Company’s engagement activities, the Company may make an investment in activities or companies
that do not currently engage in sustainability or impact investing practices that meet criteria established by the Company in an effort
to improve such target’s impact investing practices. Successful application of the Company’s impact investing strategy and
management’s engagement efforts will depend on management’s skill in properly identifying and analyzing material sustainability
issues, and there can be no assurance that the strategy or techniques employed will be successful.
We
have limited experience operating an impact investing strategy and may be subject to increased business and economic risks that could
affect our financial results.
We
have limited experience operating a business with an impact investing strategy. If we are unable to manage our impact investing operations
successfully, our financial results could be adversely affected.
We
may be unable to obtain the financing we need to pursue our impact investing strategy and any future financing we receive may be less
favorable to us than our current financing arrangements, either of which may adversely affect our ability to expand our operations.
Sustainability-focused
businesses we may seek to acquire or develop will require substantial capital investment. Our access to capital on acceptable or favorable
terms to us is necessary for the success of our impact investing strategy, particularly in enhancing our portfolio through M&A activities.
Our attempts to obtain the necessary future financing may not be successful or result in financing available on favorable terms. Our
ability to arrange for financing on a substantially non-recourse or limited recourse basis, and the costs of such financing, are dependent
on numerous factors, including general economic conditions, conditions in the global capital and credit markets, investor confidence,
the success of our business, the credit quality of the businesses being financed, and the continued existence of tax laws which are conducive
to raising capital for these types of activities. If we are not able to obtain financing on a substantially non-recourse or limited recourse
basis, we may have to finance our M&A activities using recourse capital such as direct equity investments or the incurrence of additional
debt by us. Also, in the absence of favorable financing options, we may decide not to develop or acquire facilities or businesses from
third parties. Any of these alternatives could have a material adverse effect on our growth prospects.
16
We
may also need additional financing to implement our impact investing strategic plan. For example, our cash flow from operations and existing
liquidity facilities may not be adequate to finance any acquisitions we may seek to pursue or new technologies we may seek to develop
or acquire. Financing for acquisitions or technology development activities may not be available on terms we find acceptable.
Unfavorable
legislative changes could affect our financial results.
The
environmental assets we are considering purchasing are often subject to environmental regulations, and we expect such regulatory conditions
to influence the assumptions we will make regarding the future revenues and expenses associated with such proposed acquisitions. If those
regulatory conditions change, our revenues may decrease and our expenses may increase, adversely affecting our financial results.
The
reduction or elimination of government incentives could adversely affect our business, financial condition, future results and cash flows.
Our
impact investing strategy benefits from those public policies and government incentives that support renewable energy and enhance the
economic feasibility of sustainability-based projects in regions where we operate. Such policies and incentives include tax credits,
accelerated depreciation tax benefits, renewable portfolio standards, carbon trading mechanisms, rebates, and may include similar or
other incentives to end users, distributors, or other participants in the energy or mining industry. Some of these measures have been
implemented at the federal level, while others have been implemented by various states within the United States. The availability and
continuation of these public policies and government incentives are likely to have a significant effect on the economics and viability
of our environmental businesses. Changes to such public policies or any reduction in or elimination or expiration of such government
incentives supporting or deregulating the exploration, production and use of fossil fuels may create regulatory uncertainty in the renewable
energy industry, which could have a material adverse effect on our business, financial condition, future results, and cash flows.
We
may decide not to implement, or may not be successful in implementing, one or more elements of our multi-year strategic plan, and the
plan as implemented may not achieve its goal of enhancing shareholder value through the long-term growth of our Company.
We
are implementing a multi-year strategic plan to develop an impact investing business engaged in a number of complimentary impact investing
businesses in the United States which will permit us to explore synergistic growth opportunities utilizing our core competencies.
There
are uncertainties and risks associated with our strategic plan, including with respect to implementation and outcome. We may decide to
change, or to not implement, one or more elements of the plan over time or we may not be successful in implementing one or more elements
of the plan, in each case for a number of reasons. For example, we may face significant challenges and risks expanding into an impact
investing business including:
●
our
ability to compete with the large number of other companies pursuing similar business opportunities, many of which already have established
businesses in the geographic regions we are targeting and/or have greater financial, strategic, technological or other resources
than we have;
●
our
ability to obtain financing on terms we consider acceptable, or at all, which we may need, for example, to develop new projects,
to obtain desired technology, personnel, or intellectual property, to acquire one or more existing businesses as a platform for our
expansion, or to fund internal research and development;
●
our
ability to provide services or products that keep pace with rapidly changing technology, customer preferences, equipment costs, increasing
raw materials and transportation costs, market conditions and other factors that currently are unknown to us that will impact these
markets;
●
our
ability to manage the risks and uncertainties associated with our operating the facilities and projects in this line of business,
including the variability of revenues and profitability of such projects;
●
our
ability to devote the management and other resources required to successfully implement this plan; and
●
our
ability to recruit appropriate employees and address labor market challenges in those geographic regions in which we intend to operate.
17
Apart
from the risks associated with implementing the plan, the plan itself will expose us to other risks and uncertainties once implemented.
Expanding our customer base may expose us to customers with different credit profiles than our current customers. Expanding our geographic
base will subject us to risks associated with doing business in new regions where we will have to learn the local business and political
environment. In addition, expanding into new technologies will expose us to new risks and uncertainties that are unknown to us now in
addition to the risks and uncertainties that may be similar to those we now face. The success of the plan, once implemented, will depend,
among other things, on our ability to manage these risks effectively. There is no assurance that the plan will enhance shareholder value
through long-term growth of the Company to the extent currently anticipated by our management or at all.
We
may engage in transactions with businesses or entities affiliated with our executive officers, directors or major shareholders which
may raise potential conflicts of interest.
In
carrying our impact investing strategy, we may decide to enter into a transaction or acquire a business affiliated with our executive
officers, directors or one or more of our major shareholders. We would pursue a transaction with an affiliated entity if we determined
that such affiliated entity met our criteria and guidelines for a business combination or other transaction, and such transaction was
approved by a majority of our independent and disinterested directors. We may not obtain an opinion from an independent investment banking
firm or another independent entity regarding the fairness to the Company from a financial point of view of such a business combination
or transaction. In the event of a transaction with an affiliated entity, potential conflicts of interest may exist and, as a result,
the terms of the transaction may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.
We
may not be able to successfully conclude the transactions or integrate the companies which we may acquire in the future, which could
materially and adversely affect our business, financial condition, future results and cash flow.
We
intend to carry out our impact investing strategy primarily through acquisitions. Integrating acquisitions is often costly, and we may
be unable to successfully integrate our acquired businesses with our existing operations without substantial costs, delays or other adverse
operational or financial consequences. Integrating our acquired companies involves a number of risks that could materially and adversely
affect our business, including:
●
failure
of the acquired companies to achieve the results we expect;
●
inability
to retain key personnel of the acquired companies;
●
risks
associated with unanticipated events or liabilities; and
●
the
difficulty of establishing and maintaining uniform standards, controls, procedures and policies, including accounting controls and
procedures.
If
any of our acquired companies suffers customer dissatisfaction or performance problems, this could adversely affect our reputation and
could materially and adversely affect our business, financial condition, future results and cash flow.
18
Concentration
of customers, specific projects and regions may expose us to heightened financial exposure.
The
success of our impact investing strategy may be heavily dependent on one or a limited number of customers. The financial performance
of those businesses depends on the ability of each customer to perform its respective obligations, possibly under a long-term agreement
between the parties. Our financial results could be materially and adversely affected if any of our customers fail to fulfill its contractual
obligations and we are unable to find other customers in the marketplace to purchase at the same level of profitability. We cannot be
assured that such performance failures by our customers will not occur, or that if they do occur, such failures will not adversely affect
the cash flows or profitability of our businesses. Moreover, there can be no assurance that we will be able to enter into replacement
agreements on favorable terms or at all.
Although
we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may
enter into business combinations that do not have attributes entirely consistent with our general criteria and guidelines.
Although
we have identified general criteria and guidelines for evaluating prospective target businesses that fall within our impact investing
strategy, it is possible that we may acquire or enter into transactions with a target business which will not meet all of these criteria.
If shareholder approval of the transaction is required by applicable law or other requirements, or we decide to obtain shareholder approval
for business or other reasons, it may be more difficult for us to attain shareholder approval of those business combinations if the target
business does not meet our general criteria and guidelines.
We
may make future acquisitions or form partnerships and joint ventures that may involve numerous risks that could impact our financial
condition, results of operations and cash flows.
Our
impact investing strategy may include expanding our scope of services organically or through selective acquisitions, investments
or creating partnerships and joint ventures. We may selectively acquire other businesses, product or service lines, assets or technologies
that are complementary to our business. We may be unable to find or consummate future acquisitions at acceptable prices and terms, or
we may be unable to integrate existing or future acquisitions effectively and efficiently and may need to divest those acquisitions.
We expect to continually evaluate potential acquisition opportunities in the ordinary course of business. Acquisitions involve numerous
risks, including among others:
●
our
evaluation of the synergies and/or long-term benefits of an acquired business;
●
integration
difficulties, including challenges and costs associated with implementing systems, processes and controls to comply with the requirements
of a publicly-traded company;
●
diverting
management’s attention;
●
litigation
arising from acquisition activity;
●
potential
increased debt leverage;
●
potential
issuance of dilutive equity securities;
●
entering
markets in which we have no or limited direct prior experience and where competitors in such markets have stronger market positions;
●
unanticipated
costs and exposure to undisclosed or unforeseen liabilities or operating challenges;
●
potential
goodwill or other intangible asset impairments;
●
potential
loss of key employees and customers of the acquired businesses, product or service lines, assets or technologies;
●
our
ability to properly establish and maintain effective internal controls over an acquired company; and
●
increasing
demands on our operational and IT systems.
The
success of acquisitions of businesses, new technologies and products, or arrangements with third parties is not always predictable and
we may not be successful in realizing our objectives as anticipated. Furthermore, any future credit facility entered into in connection
with such acquisitions may contain certain financial and operational covenants that limit, or that may have the effect of limiting, among
other things, the payment of dividends, acquisitions, capital expenditures, the sale of assets and the incurrence of additional indebtedness.
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We
could be exposed to significant liability for violations of hazardous substances laws because of the use or presence of such substances
at our facilities or properties.
Our
impact investing business operations will be subject to numerous federal, regional, state and local statutory and regulatory standards
relating to the generation, handling, transportation, use, storage, treatment and disposal of hazardous substances. If any hazardous
substances are found to have been released into the environment at or by one of our facilities or on one of our properties in concentrations
that exceed regulatory limits, we could become liable for the investigation and removal of those substances, regardless of their source
and time of release. If we fail to comply with these laws, ordinances or regulations (or any change thereto), we could be subject to,
among other things, civil or criminal liability, the imposition of liens or fines, the cessation of operations, or substantial expenditures
necessary to bring our operations into compliance. Furthermore, under certain federal and states laws, we can be held liable for the
cleanup of releases of hazardous substances at any of our current or former facilities or at any other locations where we arranged for
disposal of those substances, even if we did not cause the release at that location or if the release complied with applicable law at
the time it occurred. Liability under these laws can be joint and several. The cost of any remediation activities in connection with
a spill or other release of such substances could be significant and could expose us to significant liability.
Our
operations could be adversely impacted by climate change.
Our
environmental services operations may be susceptible to losses and interruptions caused by extreme weather conditions such as droughts,
hurricanes, floods, wildfires, and water or other natural resource shortages, occurrences of which may increase in frequency and severity
as a result of climate change. Climate change may also produce general changes in weather or other environmental conditions, including
temperature or precipitation levels. To the extent weather conditions continue to be impacted by climate change, our environmental services
operations and facilities may be adversely impacted in a manner that we could not predict which may in turn adversely impact our results
of operations. In addition, the potential physical effects of climate change, such as increased frequency and severity of storms, floods,
and other climatic events, could disrupt our operations and cause us to incur significant costs to prepare for or respond to these effects.
If
we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements
and our activities may be restricted, which may make it difficult for us to carry out our impact investing strategy.
If
we are deemed to be an investment company under the Investment Company Act, our activities may be subject to, among other things, restrictions
on the nature of our investments and the issuance of securities, each of which may make it difficult for us to carry out our planned
impact investing strategy. In addition, we may be subject to additional requirements including: (i) registration as an investment company
with the SEC; (ii) adoption of a specific form of corporate structure; and (iii) reporting, record keeping, voting, proxy and disclosure
requirements and other rules and regulations that we are currently not subject to. Compliance with these additional regulatory burdens
would require additional expenses for which we have not allotted funds and may hinder our ability to carry out our impact investing strategy.
In
order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must
ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities
do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our
assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will include identifying and
completing business combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to
buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to
be a passive investor. We do not believe that our principal activities will subject us to registration under the Investment Company Act.
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Risks
Related to our Common Stock
Our
common stock is illiquid and the price of our common stock may be negatively impacted by any negative operational results and factors
unrelated to our operations.
Our
common stock is quoted on the OTCQB and trading on the OTCQB is frequently highly volatile, with low trading volume. We have experienced
significant fluctuations in the price and trading volume of our common stock, which may be caused by factors relating to our business
and operational results and/or factors unrelated to the Company, including general market conditions. An active market for our common
stock may never develop, in which case it could be difficult for stockholders to sell their common stock. The market price of our common
stock could continue to fluctuate substantially.
Trading
of our stock is restricted by the SEC’s “penny stock” regulations and certain FINRA rules, which may limit a stockholder’s
ability to buy and sell our common stock.
Our
securities are covered by certain “penny stock” rules, which impose additional sales practice requirements on broker-dealers
who sell low-priced securities to persons other than established customers and accredited investors. For transactions covered by these
rules, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written
consent to the transaction prior to sale, among other things. These rules may affect the ability of broker-dealers and holders to sell
our common stock and may negatively impact the level of trading activity for our common stock. To the extent our common stock remains
subject to the penny stock regulations, such regulations may discourage investor interest in and adversely affect the market liquidity
of our common stock.
The
Financial Industry Regulatory Authority (FINRA) has adopted rules that require a broker-dealer, when recommending an investment to a
customer, to have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative
low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the
customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA
requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit an investor’s
ability to buy and sell our common stock and could have an adverse effect on the market for our shares.
If
we issue and sell additional shares of our common stock in the future, our existing stockholders will be diluted and our stock price
could fall.
Our
articles of incorporation authorize the issuance of up to 1,000,000,000 shares of common stock, of which, as of March 28, 2025, 108,616,078
shares were outstanding and 15,494,210 shares were reserved for issuance under our stock incentive plan and other outstanding options
or warrants. As a result, we have a large number of shares of common stock that are authorized for issuance that are not outstanding
or otherwise reserved, and could be issued at the discretion of our Board of Directors. We expect to seek additional financing in the
future in order to fund our operations, and if we issue additional shares of common stock or securities convertible into common stock,
our existing stockholders will be diluted. Our Board of Directors may also choose to issue shares of our common stock or securities convertible
into or exercisable for our common stock to acquire assets or companies, for compensation to employees, officers, directors, consultants
and advisors, to fund capital expenditures and to enter into strategic partnerships. Additionally, shares of common stock could be issued
for anti-takeover purposes or to delay or prevent changes in control or management of the Company. Our Board of Directors may determine
to issue shares of our common stock on terms that our stockholders do not believe enhance stockholder value, or that may ultimately have
an adverse effect on our business or the trading price of our common stock. Further, the issuance of any such shares may cause further
dilution to the ownership interest of our current stockholders, reduce the book value per share of our common stock and may contribute
to a reduction in the market price for our common stock.
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Our
principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters
subject to stockholder approval.
Certain
of our executive officers, directors and stockholders own a significant percentage of our outstanding capital stock. As of March 28,
2025, our executive officers, directors, holders of 5% or more of our capital stock and their respective affiliates beneficially owned
approximately 47.1% of our outstanding shares of common stock. Accordingly, our directors, executive officers and certain stockholders
have significant influence over our affairs due to their substantial stock ownership coupled with their positions on our management team.
For example, these stockholders may be able to control or influence elections of directors, amendments of our organizational documents,
or approval of any merger, sale of assets, or other major corporate transaction. This concentration of ownership may prevent or discourage
unsolicited acquisition proposals or offers for our common stock that some of our stockholders may believe is in their best interest.
We
are subject to the reporting requirements of federal securities laws, compliance with which involves significant time, expense and expertise.
We
are a public reporting company and are subject to the information and reporting requirements of the Exchange Act and other federal securities
laws, including the obligations imposed by the Sarbanes-Oxley Act of 2002. The ongoing costs associated with preparing and filing annual,
quarterly and current reports, proxy statements and other information with the SEC in the ordinary course, as well as preparing and filing
audited financial statements, are significant and may cause unexpected increases in operational expenses. Our present management team
is relatively small and may be unable to manage the ongoing costs and compliance effectively. It may be time consuming, difficult and
costly for us to hire additional financial reporting, accounting and other finance staff in order to build and retain a management team
with adequate expertise and experience in operating a public company.
We
have never paid dividends on our capital stock, and we do not anticipate paying any cash dividends in the foreseeable future.
The
continued operation and expansion of our business will require substantial funding. We have paid no cash dividends on any of our capital
stock to date and we currently intend to retain our available cash to fund the development and growth of our business. Any determination
to pay dividends in the future will be at the discretion of our Board of Directors and will depend upon our results of operations, financial
condition, contractual restrictions, restrictions imposed by applicable law and other factors our Board of Directors deems relevant.
We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Any return to stockholders will therefore
be limited to the appreciation of their stock, which may never occur.
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